The day Wall Street hoped would never come: The American people are finally getting the chance to see and comment on the Department of Labor’s proposed rule ending conflicts of interests and protecting Americans’ retirement savings. Wall Street and its allies had hoped this day would never come, lobbying like crazy to prevent this proposal from ever seeing the light of day because it means billions of retirement dollars would stay in Americans’ pockets instead of going into industry’s profits. But President Obama and his administration have rejected Wall Street’s money and lobbying, and the public can now have the debate they deserve. It’s time for all Americans to join this fight: should retirement advisors be able to put their interests above the best interests of their clients? That is what this fight is all about: unbiased, un-conflicted advice in your best interests. Stay informed: go to SaveOurRetirement.com to learn more about this issue. And stay engaged: follow us on Twitter and Facebook for the latest news.
Being forced to bear the costs of its own risky activities rather than being able to shift them to taxpayers, General Electric decided to de-risk by selling its banking arm. This is just how the system was supposed to work– taxpayers shouldn’t be on the hook for the risky business practices of the too big to fail banks and other nonbank firms that nearly brought down our entire financial system during the 2008 financial crash and still threaten our economy today.
Detailed investigation outlines how the revolving door can lead to weaker safeguards for the public and kill key parts of financial reform: A special investigation by Charles Levinson at Reuters shined a light on how the revolving door between industry and regulators can undermine financial reform by watering down safeguards meant to protect the public.
The analysis highlighted how a former Chair of the American Bar Association’s securities committee lobbied the Securities and Exchange Commission (SEC) against new safeguards requiring increased transparency surrounding asset-backed securities, a leading driver of the financial crisis that still threaten our economy today. After lobbying against these safeguards, this Wall Street advocate was then chosen to head the very SEC division tasked with writing them. Unsurprisingly, when the final rules were released, key transparency provisions were nowhere to be found. In another example, the report highlighted how a former JP Morgan Vice President (“know to some of her critics as ‘Loophole Leslie'”) was installed as Chair of the Financial Accounting Standards Board, which sets accounting standards for public companies, before the board released rules favored by the banks that makes them look much safer than they really are.
The SEC is supposed to protect investors on Main Street, but the revolving door spinning between industry and government is leading to weaker regulations and punishments that are so soft on wrongdoers that they fail to either punish past crime or deter future crime. This report is a fresh reminder that it’s time for Congress and the agencies to address these conflicts, because the American people deserve better.
Better Markets in the News:
Reaction to retirement advisor conflict-of-interest rule is muted, but fight looms: The Los Angeles Times by Dean Starkman 4/15/2015
Wall Street’s favorite myth just got busted: The rise of “shadow banking” and the fall of GE Capital: Salon by David Dayen 4/14/2015
The Lessons for Finance in the GE Capital Retreat: The New York Times by Peter Eavis 4/10/2015
General Electric Hands Dodd-Frank Its Biggest Victory Yet: HuffPost by Zach Carter 4/10/2015
News You Don’t Want to Miss:
Elizabeth Warren has a game-changing idea that doesn’t require Congress: Vox by Matthew Yglesias 4/15/2015
SPECIAL REPORT-How Wall Street captured Washington’s effort to rein in banks: Reuters 4/9/2015
Wall Street Fees Wipe Out $2.5 Billion in New York City Pension Gains: The New York Times by Patrick McGeehan 4/8/2015